Dec 23 2014
Exeter Resource Corporation is pleased to announce the expanded water drilling program (announced on October 7, 2014) for its Caspiche gold-copper project in northern Chile continues to provide encouraging results.
Progress to date includes completion of two additional large diameter water bore holes (LV-05 and LV-06) and two smaller diameter water monitoring holes. As expected significant water (as determined by preliminary air lift tests) has been encountered in all drill holes. Down hole pump tests, a definitive measurement technique to quantify water flow rates and the recharge rate of an aquifer, have recently commenced. The Company expects to have pump tests completed on all remaining large diameter drill holes in January, 2015.
The water drilling program continues to support Exeter's belief that the Peñas Blancas (option for 90% interest) aquifer has the potential to provide sustainable water flows of over 200 litres per second ("L/s"). Such flow rates, if confirmed, should be adequate for any of the mining options outlined in its Amended NI 43-101 Technical Report on the Caspiche Project ("2014 PEA"). See the Exeter website or Sedar for the details regarding the 2014 PEA.
The 2014 PEA identified three new low capex, potential development options, all of which required modest quantities of water compared with the requirements of a large scale open pit. The 2014 PEA calculated that the 30,000 tonne per day ("tpd") standalone oxide operation would require a peak water supply of less than 50 L/s. This option produces an estimated average of 122,000 gold equivalent* ounces annually over a projected ten year mine life, including 148,000 ounces annually in the first five years.
The standalone oxide open pit mine plan benefits from lower up front capital requirements and sequenced higher start up grades in the initial part of the mine life. In addition, a very low life-of-mine strip ratio (0.27:1) and favourable leach kinetics are positive contributors to the project economics. At US$1,300/oz gold pre-tax net present value ("NPV") is US$355 million, generating an internal rate of return ("IRR") of 34.7%, and a payback period of 3.4 years from initial construction (after-tax 27% NPV 5% US$252 million, IRR 28.5%).
The other two potential development options considered the phased treatment of both oxides and sulphides at 60,000 tpd and 27,000 tpd respectively. One option looked at mining both gold in oxides and gold-copper in sulphides by open pit only. This option required a peak water supply of about 190 L/s. The other option looked at open pit mining of gold in oxides followed by selective high grade underground mining of gold-copper sulphide mineralization, an option that required a peak supply of 150 L/s.
Andinor Limitada, a specialist Chilean water drilling company, is the principal contractor for the water program. Supervision of the program by Exeter and JV personnel is augmented by expert, independent, external consultants. These consultants will also review and compile the water data which will form the basis of water applications to the Chilean water authorities.
Jerry Perkins, Exeter´s VP Development and Operations and a "qualified person" ("QP") within the definition of that term in National Instrument 43-101, Standards of Disclosure for Mineral Projects, has reviewed and approved the technical information in this news release.
The economic analysis contained in the PEA is considered preliminary in nature. No inferred mineral resources form part of the PEA studies and no mineral reserves for the PEA have been established. Mineral resources are not mineral reserves and have no demonstrated economic viability. There is no certainty that economic forecasts outlined in the PEA will be realized. The PEA and the April 2012 Mineral Resource (as defined) may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors.